Qualcomm fought back on Monday against claims made in Apple’s $1 billion patent royalty lawsuit, calling the allegations in Apple’s complaint “baseless” and an intentional mischaracterization of its agreements with the smartphone maker.
On Friday, Apple filed suit against Qualcomm for nearly $1 billion, alleging the latter has been “charging royalties for technologies they have nothing to do with” and charges the smartphone maker “at least five times more” than the sum of its agreements with other cellular patent licensors. Apple further claimed Qualcomm had decided to withhold “nearly $1 (billion) in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.”
“Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use,” the company said in a press release. “We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.”
Apple’s decision to file a lawsuit came just two days after the Federal Trade Commission filed its own complaint against Qualcomm in a California court.
The FTC’s suit accused Qualcomm of maintaining a monopoly on baseband processors for mobile devices and alleged the company has used its dominant position to “impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.” Apple was among the companies named in the FTC suit as being directly impacted by Qualcomm’s practices, with the Commission noting Qualcomm bullied Apple into an exclusivity agreement from 2011 to 2016 through its “no license-no chips” licensing policy.
Qualcomm defended itself against the FTC allegations by calling the assertions simple “wrong” and claiming the Commission “still lacked basic information about the industry and was instead relying on inaccurate information and presumptions.”
And on Monday, Qualcomm shot back at Apple as well, noting in a statement “it is quite clear Apple’s claims are baseless.”
“Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program,” Qualcomm’s statement read. “Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information. We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.”
As of 10:10 a.m. ET Monday, Qualcomm stocks were down more than 12 percent, as it seems investors are wary of the outcome of both suits following the issuance of at least two previous nearly billion-dollar fines to Qualcomm in the past.
